Confirming recent reports, Apple has officially announced that it has signed an agreement with Intel to acquire the majority of the latter’s smartphone modem business for $1 billion. In a press release on Thursday, the iPhone maker said that around 2,200 Intel employees will join its ranks as part of the deal, along with intellectual property, equipment and leases. The transaction is expected to close in the fourth quarter of 2019, subject to regulatory approvals.
Once the deal is finalized, Apple says its overall wireless IP portfolio will rise to over 17,000 patents, ranging from protocols for cellular standards to modem architecture and modem operation. Intel will retain the ability to develop modems for non-smartphone applications, such as PCs, internet-of-things devices and autonomous vehicles, the company said.
In a press statement, Apple’s senior vice president of Hardware Technologies, Johny Srouji, said: “Apple is excited to have so many excellent engineers join our growing cellular technologies group, and know they’ll thrive in Apple’s creative and dynamic environment. They, together with our significant acquisition of innovative IP, will help expedite our development on future products and allow Apple to further differentiate moving forward”.
Intel had been working on a 5G modem for Apple over the past few years, with the chip expected to be part of iPhones by 2020. However, in the aftermath of the Apple-Qualcomm settlement earlier this year, Intel decided to exit its modem business. Apple, on its part, had been working on its own modem chips for several years before giving up the ghost earlier this year. The company last April said it plans to cease working on in-house 5G modems, raising speculations that the company may instead buy out the modem business of another company.